Legislative Committee passes measure to create Large Project Development Fund
By Jackelyn Severin
The House State Affairs committee passed a measure creating a Large Project Development Fund. The fund replaces the large project refund program which expires January 1 of 2013. Currently companies who have projects costing between 10 and 40 million dollars are given a tax refund from the contractor’s excise tax. Pat Costello is Secretary of Economic Development. Costello says the existing system often gives money away to companies who would have come to the state anyway. He says under House Bill 1230 the Governor’s Economic Development Board will decide which companies will receive incentives to come to South Dakota.
Costello says, “The primary goal for us was to allow the system to not bring in the free-riders. To be able to discern which ones would have come anyways and which ones wouldn’t and to truly incentivise the ones that aren’t.”
Costello says the Large Project Development Fund is funded from 22 percent of the revenue generated from the contractor’s excise tax.
The committee passed the bill by a vote of 9 to 4. It now goes to the house floor.
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